IN THE HIGH COURT OF KARNATAKA BENCH AT KALABURAGI
Anil B. Katti, J.
Sri Karibasappa – Appellant
Versus
Sri Mallikarjun – Respondent
Criminal Appeal No. 200106/2020
Decided On : 16-12-2022
N.I. Act - Appeal against Acquittal - Section 138 - 139 - 269-SS - 87 - 118 - 125 - 139 - 269-SS - The court discussed the legal provisions of the Negotiable Instruments Act, including Sections 138, 139, 269-SS, 87, 118, and 125. It highlighted the presumption available in favor of the complainant under Sections 118 and 139 and the impact of Section 269-SS on the enforceability of debt. The court also emphasized the need for the accused to rebut the presumption and the consequences of failing to do so.
Fact of the Case:
The accused borrowed Rs.2,00,000 from the complainant and issued a cheque, which was dishonored. The trial court acquitted the accused, but the appellant challenged the judgment, arguing that the loan transaction was valid and legally enforceable.
Finding of the Court:
The court found that the complainant had discharged the initial burden of proving the issuance of the cheque for lawful discharge of debt. It also held that the accused failed to rebut the presumption available in favor of the complainant under Sections 118 and 139 of the N.I. Act.
Issues: The issues included the validity of the loan transaction, the enforceability of the debt, the impact of Section 269-SS of the Income Tax Act, and the rebuttal of the statutory presumption available in favor of the complainant.
Ratio Decidendi: The court emphasized the need for the accused to rebut the presumption under Sections 118 and 139 of the N.I. Act and discussed the impact of Section 269-SS on the enforceability of debt. It also highlighted the consequences of failing to probablize the defense to disprove the statutory presumption.
Final Decision: The appeal was allowed, the judgment of acquittal was set aside, and the accused was convicted for the offense under Section 138 of the N.I. Act. The accused was sentenced to pay a fine of Rs. 2,00,000 or undergo imprisonment for three months in default of payment of the fine.
JUDGMENT
1. The appellant/complainant is challenging the judgment of acquittal passed by II Additional Civil Judge & JMFC-II, Vijayapura in C.C.No.1527/2012, dated 06.07.2020 for the offence under Section 138 of Negotiable Instruments Act (hereinafter referred to as 'N.I. Act').
2. The parties to the appeal are referred with their ranks as assigned in the Trial Court for the sake of convenience.
3. The factual matrix leading to the case of complainant can be stated in nutshell to the effect that on 07.02.2010 accused has approached the complainant and requested to give hand loan of Rs.2,00,000/-, which was required for his contract work. The complainant has gave Rs.2,00,000/- on assurance of accused that he will return the same within 9 months. The accused in order to discharge the said debt has issued Cheque bearing No.130702 dated 07.12.2010 drawn on Alahabad Bank, Vijayapura. The complainant presented the said Cheque for collection on 27.01.2011 and the same was dishonoured for want of sufficient funds vide bank endorsement dated 28.01.2011. On intimating the said fact to the accused, the accused has requested to represent the Cheque after 20 days. The complainant has represented the Cheque on 28.02.2011 through his Banker State Bank of India, Treasury Bank, Vijayapura. The same was again dishonoured with endorsement of insufficient funds vide memo of Bank dated 01.03.2011. The complainant has issued Demand Notice on 14.03.2011. The wife of accused has received the notice on 16.03.2011. However, the accused has neither replied to the notice nor paid the money covered under the Cheque. The complaint is filed on 29.04.2011.
4. In response to the summons, the accused has appeared through counsel and contested the case. The complainant in order to prove his case relied on the oral evidence of PW1 and the documents as per Exs.P1 to Ex.P6. The accused has examined himself as DW1 and relied on the document as per Ex.D1. The Trial Court after having heard the arguments of both sides has acquitted the accused from the charge leveled against him for the offence under Section 138 of N.I. Act.
5. The appellant/complainant has challenged the correctness and legality of the said judgment of acquittal contending that non-mentioning of date as to when money was given cannot be fatal to the case of complainant. The Trial Court was not justified in doubting the loan transaction by invoking Section 269-SS of Income Tax Act and committed serious error in recording the finding that it is not legally enforceable debt. The accused has never questioned financial capacity of complainant in lending the money. The claim of accused that Cheque as per Ex.P1 was given as security and there was no cause of action brought on record during the course of cross- examination of PW1 is not supported by any evidence on record. The approach and appreciation of oral and documentary evidence by the Trial Court is contrary to law and evidence on record. Therefore, prayed for allowing the appeal and to convict the accused for the charge leveled against him.
6. In response to the notice of appeal, respondent has appeared through his counsel.
7. The trial Court records have been secured.
8. Heard the arguments of both sides.
9. The appellant/complainant in support of his oral evidence about issuance of Cheque by accused for legally enforceable debt, has relied on the Cheque as per Ex.P1 dated 07.12.2010. The complainant has presented the said Cheque on 27.01.2011 and the same was dishonoured with
an endorsement as 'insufficient funds' vide Bank intimation dated 28.01.2011. On intimation of the said fact, on request of accused, complainant has represented the Cheque after 20 days on 28.02.2011. The same was again dishonoured as 'insufficient funds' vide Bank intimation dated 01.03.2011 at Ex.P3. The complainant has issued Demand Notice dated 14.03.2011 at Ex.P5. The same is served to the wife of accused on 16.03.2011 at Ex.P6. The accused has neither replied to the notice nor pa
Assistant Director of Inspection Investigation vs. A.B.Shanti
The issuance of a cheque under the Negotiable Instruments Act creates a statutory presumption of debt, which the accused must rebut to avoid liability; mere claims of illegality without evidence do n....
The issuance of a cheque signifies a legally enforceable debt under Section 138 of the N.I. Act, and the burden to prove otherwise lies with the accused, not the complainant.
Dishonour of cheque – Provision does not say that a person cannot advance more than Rs.20,000/- in cash to another person.
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